SAFEGUARDS — Temporary and selective measures (such as increased tariffs, tariff quotas,or quantitative restrictions) explicitly designed to slow imports in order to enable a particular domestic industry to adjust to heightened competition from foreign suppliers. Safeguard actions are known in the United States as "escape clause" actions, and the authority to take such actions is provided for in various U.S. laws, most prominently Section 201 of the Trade Act of 1974, as amended. The GATT's safeguard provision, Article XIX (Emergency Action on Imports of Particular Products), recognizes a country's right to withdraw or modify concessions granted earlier or to impose new restrictions if a product is "being imported in such increased quantities...as to cause or threaten serious injury to domestic producers" and to maintain such restrictions "for such time as may be necessary to prevent or remedy such injury." Exporters have a complementary right under GATT not to be deprived arbitrarily of access to foreign markets. The WTO Agreement on Safeguards establishes rules for the application of the safeguard measures contained in GATT Article XIX. See also Adjustment; Agreement on Safeguards; Agreement on Textiles and Clothing; Article 11 (GATT Article XI); Article 19 (GATT Article XIX); Codes of Conduct; Competitive; Concession; Escape Clause; Framework Agreement; General Agreement on Tariffs and Trade; Import Relief; Market Access; Omnibus Trade and Competitiveness Act of 1988; Orderly Marketing Agreements; Protectionism; Quantitative Restrictions; Section 22; Section 201; Section 406; Selective Quotas; Sensitive Products; Specific Limitations on Trade; Special and Differential Treatment; Tokyo Round; Trade Barriers; Trade Act of 1974; Uruguay Round; U.S. International Trade Commission; Voluntary Restraint Agreements; World Trade Organization.

SALES TAX — A tax levied on the exchange of goods and services at one or more stages in the process of distribution. See also Distribution; Excise Tax; Indirect Tax; Value-Added Tax.

SANCTIONS — See Embargo.

SANITARY AND PHYTOSANITARY MEASURES (SPS) — Any measures applied to protect human or animal life from risks arising from additives, contaminants, toxins, or disease-causing organisms in their food; to protect human life from plant- or animal-carried diseases; to protect animal or plant life from pests, diseases, or disease-causing organisms; and to prevent or limit other damage to a country from the entry, establishment, or spread of pests. These include measures taken to protect the health of fish and wild fauna, as well as of forests and wild flora. The WTO’s Agreement on the Application of Sanitary and Phytosanitary Measures, which entered into force with the establishment of the World Trade Organization on January 1, 1995, is intended to prevent SPS measures from restricting or distorting international trade. See also Agreement on Agriculture; Agreement on the Application of Sanitary and Phytosanitary Measures; Agreement on Technical Barriers to Trade; Nontariff Barriers; Quarantine, Sanitary, and Health Laws and Regulations; Standards.

SCHEDULE — See Concession; Demand; Supply; Tariff Schedules.

SCHEDULE OF CONCESSIONS — See Accession; Bound Rates; Concession.

SCHUMAN PLAN — See European Coal and Steel Community.

SDRs — See Special Drawing Rights.

SEATTLE MINISTERIAL — The WTO's third ministerial conference, held from November 30 to December 3, 1999, in Seattle, Washington. The first ministerial conference of the WTO was held at Singapore in December 1996. At the second WTO ministerial conference, held in May 1998 in Geneva, ministers established a process under the WTO General Council to prepare for the third ministerial conference. This process called on the WTO General Council to submit recommendations regarding the WTO's work program to ministers, enabling them to take decisions in Seattle. However, those attending the Seattle ministerial failed to reach agreement on a new round of trade negotiations. See also Brussels Ministerial; GATT Ministerial Meeting of 1982; General Agreement on Tariffs and Trade; Montreal Ministerial; Multilateral Trade Negotiations; Punta del Este Ministerial; Round; World Trade Organization.

SECTION 22 — A provision of the Agricultural Adjustment Act of 1933, as amended, that authorizes the U.S. president to impose quantitative restrictions on imports of agricultural products when such imports appear likely to affect price support programs operated by the U.S. Department of Agriculture. The president has imposed such quotas on imports of wheat, flour, cotton, peanuts, cheese, butter, and other dairy products. In 1956 the GATT contracting parties authorized a waiver of Article XI prohibitions against quantitative restrictions for U.S. actions under Section 22. Since that time, the United States has submitted an annual report to the contracting parties on all relevant actions and the reasons for them. See also Article 11 (GATT Article XI); Import Relief; Public Law 480; Quantitative Restrictions; Safeguards; Sensitive Products; Waiver.

SECTION 201 — A provision of the U.S. Trade Act of 1974, as amended by the Omnibus Trade and Competitiveness Act of 1988 and the Uruguay Round Agreements Act of 1994, known as an "escape clause." Section 201 is the United States' implementation of Article XIX, the safeguard provision of the 1994 GATT, as interpreted by the WTO Agreement on Safeguards. It sets forth the authority and procedures for the president to take action, including import relief, to facilitate efforts by a domestic industry that has been seriously injured by imports to make a positive adjustment to import competition. Under Section 201, the U.S. International Trade Commission (USITC) investigates whether an article is being imported into the United States in such increased quantities, absolute or relative to domestic production, as to be a substantial cause of serious injury, or threat thereof, to a domestic industry. If the USITC finds that a domestic industry has been seriously injured or threatened with serious injury, it recommends to the president relief to the industry in the form of temporary import restrictions (tariffs, quotas, or tariff-rate quotas) or trade adjustment assistance. Such import relief cannot exceed eight years, including extensions. See also Adjustment; Adjustment Assistance; Agreement on Safeguards; Article 19 (GATT Article XIX); Compensation; Escape Clause; Import Relief; Omnibus Trade and Competitiveness Act of 1988; Reciprocity; Safeguards; Section 406; Trade Act of 1974; Uruguay Round Agreements Act; U.S. International Trade Commission.

SECTION 232 INVESTIGATIONS — A provision under the U.S. Trade Expansion Act of 1962, as amended, under which the U.S. Department of Commerce's Bureau of Export Administration conducts investigations of the effect of imports on U.S. national security. Investigations may be initiated at the request of an interested party or may be initiated by the Commerce Department. Among the most important criteria considered are:

• Requirements of the defense and essential civilian sectors;
  
• Maximum domestic production capacity;
  
• Quantity, quality, and availability of imports;
  
• Impact of foreign competition on the economic welfare of the essential domestic industry;
  
• Other factors relevant to the unique circumstances of the specific case.

SECTION 301 — A provision of the U.S. Trade Act of 1974, as amended, that gives the U.S. Trade Representative the authority to negotiate to eliminate a large range of foreign trade practices. The authority to take such action requires a finding that a foreign government has denied U.S. rights under a trade agreement, has taken action that is inconsistent with or otherwise denies benefits to the United States under a trade agreement; or has engaged in an act, policy, or practice that is unjustifiable, unreasonable, or discriminatory and that burdens or restricts U.S. commerce. See also Concession; Domestic Subsidy; Export Subsidy; Omnibus Trade and Competitiveness Act of 1988; Special 301; Super 301; Trade Act of 1974; Unfair Trade Practices.

SECTION 332 — A provision of the U.S. Tariff Act of 1930 that provides the basic statutory authority for the U.S. International Trade Commission (USITC) to conduct fact-finding investigations and issue reports on any matter relating to trade. Such reports do not contain recommendations unless they have been specifically requested, and they do not provide a legal basis for other trade actions by the president. Investigations conducted by the USITC under Section 332 are instituted in response to a request from the Ways and Means Committee of the U.S. House of Representatives, the Finance Committee of the U.S. Senate, either branch of the Congress, the president, the U.S. Trade Representative under authority delegated by the president, or upon the commission's own motion. See also Tariff Act of 1930; United States Trade Representative; U.S. International Trade Commission.

SECTION 337 — A provision of the U.S. Tariff Act of 1930 that protects U.S. industries from imports that infringe valid patents, copyrights, trademarks, and other intellectual property rights. Parties can obtain relief in the form of cease-and-desist and exclusion orders if they succeed in showing they are a "domestic industry" under the statute and that their intellectual property right is valid and infringed. Economic injury does not need to be demonstrated regarding patents, federally registered trademarks, copyrights, and semiconductor mask works. For other forms of intellectual property, economic injury must be demonstrated. The president may approve, disapprove, or fail to disapprove any U.S. International Trade Commission (USITC) order within a 60-day review period. The president may disapprove a USITC exclusion order for policy reasons, which include the effect of the order on the public health and welfare, competitive conditions in the U.S. economy, the production of like or directly competitive items in the United States, the effect of the order on U.S. consumers, and the impact of the order on foreign relations. See also Commercial Counterfeiting; Copyright; Intellectual Property; Knowledge-Based Industry; Patent; Process Patent; Property; Special 301; Tariff Act of 1930; Trademark; Trafficking in Counterfeit Goods and Services.

SECTION 406 — A provision of the U.S. Trade Act of 1974 established to provide a remedy against market disruption caused by imports into the United States from communist countries. The provisions of Section 406, as amended by the Omnibus Trade and Competitiveness Act of 1988, are similar to those under Sections 201 to 203 of the Trade Act of 1974. However, Section 406 provides a lower standard of injury causation and, unlike Section 201, the investigation can be brought against imports from a specific country rather than all imports of a specific product. Section 406 requires the U.S. International Trade Commission (USITC) to investigate complaints filed by domestic industries or workers claiming that imports from a communist country are causing market disruption with respect to a domestically produced article. If the USITC finds that market disruption exists, it must recommend to the president relief in the form of temporary import restrictions such as tariffs, quotas, or tariff-rate quotas to prevent or remedy such market disruption. See also Agreement on Safeguards; Article 19 (GATT Article XIX); Import Relief; Market Disruption; Nonmarket Economy; Protectionism; Safeguards; Section 201; Trade Act of 1974; U.S. International Trade Commission.

SECURITY — A document giving title to property as collateral for a bank loan. Also, saleable income-yielding paper traded in a stock exchange, such as stocks and shares. See also Broker; Capital Market; Commercial Paper; Loan; Property; Spot Market.

SECURITY CAPITAL — See Risk.

SELECTIVE QUOTAS — See Quantitative Restrictions; Safeguards.

SELF-INITIATION — Initiation of a trade action by the U.S. agency charged with enforcing the relevant trade laws, rather than in response to a complaint or petition by the Congress or by a private party. For example, the Office of the U.S. Trade Representative may self-initiate a Section 301 investigation or may initiate it in response to a petition from an interested party. See also Section 301; United States Trade Representative.

SEMICONDUCTOR AGREEMENTS — A series of bilateral agreements between the United States and Japan, entered into between 1986 and 1999, to improve access to the Japanese market for foreign capital-affiliated semiconductor producers. The 1999 arrangement, which takes the form of a joint statement by governments, was joined not only by Japan and the United States but by Korea, Taiwan, and the European Union. The 1999 arrangement will be subject to review after August 1, 2004. Key provisions of the 1999 joint statement include a commitment by all parties to barrier-free trade in semiconductors in markets worldwide; the principle that competitiveness of companies and their products, not the intervention of governments and authorities, should be the key determinant of industrial success; the principle that governments' measures should be consistent with the WTO agreements; the principle that governments should avoid any form of discrimination; and the parties' recognition of the need to avoid the problem of injurious dumping through antidumping measures consistent with GATT 1994 and the WTO Agreement on Implementation of Article VI of GATT 1994. See also Agreement on Implementation of Article VI of GATT 1994; Bilateral Trade Agreement; Binding; Concession; Market Access; Trade Agreement.

SEMI-PROCESSED PRODUCT — See Primary Commodity; Tariff Escalation.

SENSITIVE PRODUCTS — Domestically produced goods considered economically and politically important in a country whose competitive position would be threatened if protection against the imports of similar goods were reduced. The steel and textiles industries in many developed countries, for example, employ large numbers of workers, often in communities that cannot in the short term offer alternative employment. For these reasons, there has been strong opposition to the reduction of tariff and other trade-restricting measures affecting sensitive products. See also Adjustment; Competitive; Escape Clause; Generalized System of Preferences; Liberalization; Linear Reduction of Tariffs; Orderly Marketing Agreements; Protection; Safeguards; Specific Limitations on Trade; Textiles; Voluntary Restraint Agreements.

SERVICES — Economic activities — such as transportation, banking, insurance, tourism, telecommunications, advertising, entertainment, data processing, and consulting — that normally are consumed as they are produced, as contrasted with economic goods that are more tangible. Service industries, which are usually labor intensive, have become increasingly important in domestic and international trade since at least the 1920s. Services account for about two-thirds of the economic activity of the United States and for a rapidly increasing percentage of U.S. exports. Traditional GATT rules have not applied the same discipline to restrain the imposition of nontariff barriers to trade in services that has been applied to international trade in goods. The establishment and incorporation into GATT of disciplines on trade in services was a major objective of the Uruguay Round. The WTO General Agreement on Trade in Services (GATS) established a framework to permit freer trade in over 140 sectors including construction and tourism. It sets some basic rules including national treatment, transparency, and recognition requirements for purposes of permitting foreign nationals to be professionally licensed or certified in another market. See also GATT Ministerial Meeting of 1982; General Agreement on Trade in Services; Insurance; Invisible Trade; Price; Structural Impediments Initiative; Uruguay Round; Utility.

SHIPPING CONFERENCE — An alliance made up of a number of carriers that provide service from point to point for a defined route, which is distributed based upon market share.

SINGLE-COLUMN TARIFF — A tariff schedule listing only one duty rate for each imported product. The United States maintained a single-column tariff schedule until 1909, when special preferences were instituted for products imported from Cuba and the Philippines. See also Column 1 Rates; Column 2 Rates; Enabling Clause; Generalized System of Preferences; Preferences; Tariff; Tariff Schedules of the United States.

SINGLE EUROPEAN ACT (SEA) — See European Community.

SMOOT-HAWLEY TARIFF ACT OF 1930 — See Tariff Act of 1930.

SNAPBACK — A return to earlier and usually higher tariff levels. See also Tariff; Tariff Schedules.

SNPA — See Substantial New Program of Action.

SOCIAL OVERHEAD CAPITAL — See Infrastructure.

SOCIAL SECURITY CHARGES — See Direct Tax.

SOCIALIST ECONOMIES — See Nonmarket Economy.

SOFT LOAN — A credit providing for significantly easier repayment terms than credits that are normally obtainable from commercial banks. A soft loan frequently involves a grace period of several years and only a small servicing charge. See also Additionality; Credit; Inter-American Development Bank; Interest; International Development Association; International Monetary Fund; Loan; Multilateral Aid; Multilateral Investment Fund; Official Development Assistance; Overseas Private Investment Corporation; Risk; Security; Tied Loan; World Bank.

SOUTH — See Developing Countries.

SOUTH-SOUTH TRADE — Trade between developing countries. See also Andean Pact; Asia-Pacific Economic Cooperation; Economic Cooperation Among Developing Countries; Global System of Trade Preferences; Group of 77; MERCOSUR; Non-Aligned Movement; Preferences; United Nations Conference on Trade and Development.

SPECIAL 301 — A statute that requires the U.S. Trade Representative to identify, on an annual basis, those foreign countries that deny adequate and effective protection of intellectual property rights or fair and equitable market access for Americans relying on intellectual property protection. Section 182 of the Trade Act of 1974, added by section 1303 of the Omnibus Trade and Competitiveness Act of 1988, is intended to present a comprehensive approach to intellectual property and market access and to enhance the administration's ability to negotiate improvements in foreign intellectual property regimes through bilateral and/or multilateral initiatives. On the basis of the USTR’s review, countries not making significant progress or not entering into good faith negotiations may be placed in one of three categories — Priority Foreign Country; Priority Watch List; and Watch List. Priority Foreign Countries are subject to investigation under Section 301 conducted on an accelerated time frame. In addition, USTR makes "other observations" about the situation in certain counties, including noting growing concern about piracy, highlighting recent developments, or identifying expectations for further progress, where this is appropriate. See also Agreement on Trade-Related Aspects of Intellectual Property Rights; Commercial Counterfeiting; Concession; Copyright; Intellectual Property; Knowledge-Based Industry; National Trade Estimate Report; National Treatment; Omnibus Trade and Competitiveness Act of 1988; Patent; Priority Foreign Country; Priority Watch List; Process Patent; Property; Section 301; Section 337; Super 301; Technology; Technology Transfer; Trade Act of 1974; Trademark; Trafficking in Counterfeit Goods and Services; Uruguay Round; Uruguay Round Agreements Act; Watch List; World Intellectual Property Organization; World Trade Organization.

SPECIAL AND DIFFERENTIAL TREATMENT (S&D) — The concept that exports of developing countries should be given preferential access to markets of developed countries and that developing countries participating in trade negotiations need not fully reciprocate concessions they receive. This principle was first discussed widely during the Kennedy Round, leading to the adoption of Part IV of GATT, which obligated developed countries to pursue trade policies that take into account the development needs of developing countries. The Tokyo Declaration subsequently proclaimed that exports of developing countries should receive particular benefits consistent with their trade, financial, and development needs. Among proposals considered during the Tokyo Round negotiations for accomplishing this were compensatory tariff reductions for exports of developing countries to offset any reductions in their margin of preference that might result from Tokyo Round tariff cuts; advance implementation of Tokyo Round tariff cuts affecting developing country exports; substantial reduction or elimination of tariff escalation; special provisions for developing country exports in any new codes of conduct covering nontariff barriers; assurance that any new multilateral safeguard system would contain special provisions for developing country exports; and the principle that developed countries would expect less than full reciprocity for trade concessions granted to developing countries. The Framework Agreement concluded at the end of the Tokyo Round provides a legal basis for special and differential treatment in favor of exports from developing countries, and some of the codes of conduct negotiated in the Tokyo Round provided for such treatment. Under the WTO agreements and the WTO Decision on Measures in Favor of Least Developed Countries, developing countries are given much longer than developed countries for phasing in trade liberalization measures in several areas, including agriculture, intellectual property, investment, dumping, and subsidization. See also Codes of Conduct; Compensation; Concession; Framework Agreement; Generalized System of Preferences; Graduation; Kennedy Round; Margin of Preference; Market Access; Multilateral Trade Negotiations; North-South Trade; Part IV of the GATT; Preferences; Reciprocity; Request List; Safeguards; Tariff Escalation; Tokyo Declaration.

SPECIAL DRAWING RIGHTS (SDRs) — A supplemental monetary reserve asset created in 1969 by the International Monetary Fund (IMF). SDRs are available to governments through the IMF and may be used in transactions between the IMF and member governments. IMF member countries have agreed to regard SDRs as complementary to gold and reserve currencies in settling their international accounts. The unit value of an SDR reflects the foreign exchange value of a "basket" of currencies of several major trading countries (the U.S. dollar, the German mark, the French franc, the Japanese yen, and the British pound). The SDR has become the unit of account used by the IMF, and several national currencies are pegged to it. Some commercial banks accept deposits denominated in SDRs. See also Currency; International Monetary Fund; Reserve Currency.

SPECIAL REPRESENTATIVE FOR TRADE NEGOTIATIONS (STR) — See United States Trade Representative.

SPECIFIC DUTY — See Specific Tariff.

SPECIFIC LIMITATIONS ON TRADE — Government measures that restrict imports or exports of a product during a given period to an explicitly stated volume or value, usually by requiring a license or other government authorization for each export or import transaction. See also Boycott; Embargo; Exchange Controls; Export Quotas; Licensing; Nontariff Barriers; Quantitative Restrictions; Tariff Quota.

SPECIFIC TARIFF — A customs duty assessed as a stated monetary amount per unit of physical quantity, such as so many cents a pound, a bushel, or a yard, regardless of the value of the imported item. See also Ad Valorem Tariff; Tariff.

SPECULATIVE RISK — See Risk.

SPOT MARKET — A market in which goods or securities are traded for immediate delivery. The spot price is, therefore, the price for immediate delivery. See also Forward Market; Market; Price; Security.

STABEX — See Lomé Convention.

STANDARD INDUSTRIAL CLASSIFICATION (SIC) — See North American Industry Classification System.

STANDARD INTERNATIONAL TRADE CLASSIFICATION (SITC) — An international foreign data scheme that permits international comparisons of foreign trade data. It was developed by the United Nations in 1950 and is used solely by international organizations for reporting international trade.

STANDARDS — Technical specifications that lay down characteristics of a product such as size, quality, performance, or safety. Standards may also cover terminology, testing methods, packaging, labeling, or marking requirements. The Tokyo Round Agreement on Technical Barriers to Trade — usually known as the "Standards Code" — seeks to ensure that national standards are not used to impede trade. See also Codes of Conduct; Nontariff Barriers; Packaging, Labeling, and Marking Regulations; Quarantine, Sanitary, and Health Laws and Regulations; Trade Agreements Act of 1979.

STANDARDS CODE — See Standards.

STATE TRADING COMPANIES — Government-owned or government-controlled enterprises that export and/or import goods and services. State-trading companies exist in countries with mixed economies — in which privately owned enterprises also play an important economic role — as well as in socialist countries. See also Nonmarket Economy; Public Sector; Unfair Trade Practices.

STATEMENT OF ADMINISTRATIVE ACTION (SAA) — See Uruguay Round Agreements Act.

STEEL — See Sensitive Products; Trigger Price Mechanism.

STEEL VOLUNTARY RESTRAINT ARRANGEMENTS (VRAs) — Formal agreements between the United States and the governments of 16 countries plus the EC. Although the structure of the arrangements varied, exports to the United States of both carbon and specialty steel products were restricted either to a specified quota or to a percentage of U.S. import penetration, based on quarterly estimates of U.S. domestic consumption. The VRA program was initiated for five years beginning October 1, 1984, and was subsequently extended in September 1989 for two and one-half more years. The last VRA program terminated March 31, 1992. See also Export Quotas; Export Restraints; International Commodity Agreement; Multilateral Agreement; Orderly Marketing Agreements; Sensitive Products; Voluntary Restraint Agreements.

STOCKBROKER — See Broker.

STOCKHOLM CONVENTION — See European Free Trade Association.

STOCKPILES — See Buffer Stocks; Strategic Stockpiles.

STRATEGIC STOCKPILES — Accumulated stocks of raw materials or other commodities deemed essential to national defense and maintained so that a country's actual or potential supply of the goods stocked will not fall below the quantity likely to be required for a given period of national emergency. The U.S. Strategic and Critical Stockpiling Act of 1946 authorizes the General Services Administration to maintain strategic stockpiles, and to expand or reduce them, according to changing estimates of defense needs, while making every effort to phase purchases or sales so as to have minimum effects on world prices. Buffer stocks, in contrast with strategic stockpiles, are intended to stabilize prices and thus protect exporters against economic losses they would face when prices decline precipitously. See also Buffer Stocks; Commodity.

STRUCTURAL CHANGE — Long-term trends in the principal elements of an economic system, including its patterns of production, consumption, trade, and relative prices. Structural change can take place within national economies and is reflected in the ever wider and deeper linkages among them and the consequent increasing interdependence of the world economy. Expansion in the economy as a whole and temporary, cyclical shifts of its components are not considered structural changes. Since the Industrial Revolution, structural change within most national economies has resulted principally from developments in comparative advantage associated with technological advance, improved infrastructure, and changing consumer preference, factors that have characteristically reflected movement from subsistence to commercial agriculture; reduction in the percentage of the labor force engaged in agriculture and increases in the relative significance of manufacturing (and, at a later stage, a further development toward service industries); changes in the relative economic importance of various industries; the rise and decline of specific economic activities in different countries and regions; and evolution in the composition of exports and imports. See also Adjustment; Adjustment Assistance; Comparative Advantage; Competitive; Demand; Developing Countries; Economic Development; Industrial Revolution; Infrastructure; Services; Technology; Trade Diversion; Technology Transfer; Welfare.

STRUCTURAL IMPEDIMENTS INITIATIVE (SII) — U.S.-Japan bilateral talks aimed at identifying and removing internal impediments that inhibit external account adjustment and market access. See also Bilateral Trade Agreement; Market; Market Access; Market Forces; Nontariff Barriers; Restrictive Business Practices.

SUBSIDIARY — A company controlled by another company, usually through ownership of 50 to 100 percent of its shares or through other organizational or managerial arrangement. See also Multinational Corporation; Restrictive Business Practices; Unfair Trade Practices.

SUBSIDIES CODE — See Agreement on Subsidies and Countervailing Measures; Countervailing Duties.

SUBSIDY — An economic benefit granted by a government to domestic producers of goods or services, often to strengthen their competitive position. The subsidy may be direct (a cash grant) or indirect (low-interest export credits guaranteed by a government agency, for example). The Illustrative List of Export Subsidies, an annex to the WTO Agreement on Subsidies and Countervailing Measures, enumerates certain practices that, under certain circumstances, constitute countervailable export subsidies within the terms of the agreement. These include direct subsidies to a firm or industry contingent upon export performance, currency retention schemes, or other practices that involve a bonus, preferential internal transport and freight charges on export shipments, remission of direct taxes specifically related to exports, provision of services or goods on preferential terms for use in the production of exported goods, and export credit guarantees. See also Agreement on Subsidies and Countervailing Measures; Bounties; Competitive; Countervailing Duties; Domestic Subsidy; Export Subsidy; Illustrative List; Industrial Policy; Infant Industry Argument; International Arrangement on Export Credits; Nontariff Barriers.

SUBSTANTIAL NEW PROGRAM OF ACTION (SNPA) — A comprehensive statement of economic measures to be taken by the international community to enhance the outlook for economic development in the least developed countries, as agreed at the United Nations Conference on the Least Developed Countries, which was held in Paris in August 1981. See also Developing Countries; Economic Development; Least Developed Countries; United Nations Conference on Trade and Development.

SUMMITS OF THE AMERICAS — Meetings of 34 democratically elected heads of state and government in the Western Hemisphere. In December 1994, at the invitation of President Bill Clinton, the group met in Miami, Florida, for the First Summit of the Americas. The leaders agreed on an agenda of economic integration that includes the creation of the Free Trade Area of the Americas (FTAA); joint efforts to strengthen democracy and the rule of law; cooperation against corruption, narcotics trafficking, and terrorism; and raising the welfare of member populations through better education, health care, and protection of the environment. The leaders met in Santiago, Chile, at the Second Summit of the Americas in April 1998 and initiated the negotiating phase of the FTAA. Recognizing the need to seek broad-ranging input into the FTAA process, the leaders established a committee of government officials from all 34 countries to give interested members of the public throughout the Western Hemisphere the means to have their views considered by the trade ministers and trade negotiators as they construct the FTAA. Such a committee is unprecedented in an international trade negotiation. The Santiago Summit devoted much of its other work to education; democracy, justice, and human rights; and eradication of poverty and discrimination. See also Customs Area; Customs Union; Free Trade Area of the Americas; North American Free Trade Agreement; U.S.-Canada Free Trade Agreement.

SUNSET REVIEW — A determination regarding the termination of antidumping and countervailing duty orders and suspension agreements. Article 11 of the WTO Agreement on Implementation of Article VI of GATT 1994 and Article 21 of the WTO Agreement on Subsidies and Countervailing Measures provide for the termination, or sunset, of such orders and suspension agreements after five years unless the authorities determine that this would be likely to lead to the continuation or recurrence of dumping, subsidization, or injury. Accordingly, section 220 of the Uruguay Round Agreements Act provides that orders may be revoked and suspension agreements terminated after five years if the terms are met. In antidumping cases, the U.S. Department of Commerce is to determine whether revocation of an order or termination of a suspension agreement could lead to continuation or recurrence of dumping. In addition, it is to provide to the U.S. International Trade Commission the magnitude of the margin of likely dumping if the order is revoked or the suspended investigation terminated. In countervailing duty cases, the Commerce Department is to determine whether revocation of an order or termination of a suspension agreement could lead to continuation or recurrence of a countervailable subsidy. In addition, the department is to provide to the USITC the amount of the net countervailable subsidy that is likely to prevail if the order is revoked or the suspended investigation terminated. In both antidumping and countervailing duty cases, the USITC is to determine whether revocation could lead to the continuation or recurrence of material injury within a reasonably foreseeable period of time. See also Agreement on Implementation of Article VI of GATT 1994; Agreement on Subsidies and Countervailing Measures; Anti-Dumping Code; Countervailing Duties; Dumping; International Trade Administration; Uruguay Round Agreements Act; U.S. International Trade Commission.

SUPER 301 — A trade law provision under which the U.S. Trade Representative identifies, in an annual report, those "priority foreign country practices" that, if eliminated, have the greatest potential for the expansion of U.S. exports. Section 301 of the Trade Act of 1974, as added by section 1302 of the Omnibus Trade and Competitiveness Act of 1988, required the USTR in 1989 and 1990 to identify trade liberalization priorities and to initiate Section 301 investigations with respect to such priority practices in all countries where these liberalization priorities had not been met. This particular aspect of U.S. trade law expired in 1991. On March 3, 1994, President Bill Clinton signed an executive order reinstituting the Super 301 trade law provision; he later extended the provision to calendar years 1996 and 1997. However, authority under Super 301 expired in 1997 at which time it again expired. On January 26, 1999, USTR announced the re-institution of Super 301, identifying its significance in addressing market access issues. After identification, the priority foreign country practices become the subject of investigations under Section 301. The first step of that process is consultations with the foreign government in an effort to reach agreement on the elimination of the practices in question or, in appropriate cases, on compensation for the damage done by the practices. If no agreement is reached, the investigation continues. Where the foreign practices at issue constitute violations of trade agreements such as the GATT or the WTO, the United States takes those practices to the dispute-resolution process created in those agreements. At the end of the investigation, USTR determines if the practices are actionable under Section 301 and, if so, what action should be taken in response to them. See also Liberalization; National Trade Estimate Report; Omnibus Trade and Competitiveness Act of 1988; Priority Foreign Country; Section 301; Trade Act of 1974; Unfair Trade Practices; United States Trade Representative; World Trade Organization.

SUPPLY — The quantity of an economic good that sellers will make available at a given price at a certain time in a specific market. A supply schedule indicates the quantity of an economic good that might enter the market at all possible prices at a particular time. Supply in a market economy is principally determined by the response of many individual entrepreneurs and firms to their perceptions of opportunities for earning profits. See also Demand; Entrepreneur; Goods; Market; Market Economy; Price Elasticity of Supply; Private Sector; Profit.

SUPPLY ACCESS — Assurance that importing countries have fair and equitable access at reasonable prices to supplies of raw materials and other essential imports. Such assurance might include explicit constraints against the use of the export embargo as an instrument of foreign policy. Requests for such assurance reflect the desire of countries to have a consistent supply of important raw materials at stable prices. See also Embargo; Market; Supply.

SUPPLY SCHEDULE — See Supply.

SURPLUS — The amount of a commodity that cannot be absorbed in a given market at the existing price. See also Demand; Market; Market Forces; Public Law 480; Supply.

SUSPENSION OF LIQUIDATION — Delay of the final payment of all duties owing on items imported into the United States. Where the amount of duty is not finally determined at the time that the item is entered, such as when an antidumping or countervailing duty investigation is pending, liquidation is "suspended" until the investigation is completed and a final duty determination is issued. When the U.S. Customs Service is instructed to suspend liquidation, each district director is directed to require a cash deposit, or the posting of a bond or other security, for each entry concerned equal to the amount by which the normal value exceeds the U.S. price. Under U.S. law, the preliminary determination in an antidumping investigation (or final determination after a negative preliminary determination), if affirmative, provides for the suspension of liquidation of all entries of covered merchandise that are entered or withdrawn from warehouse for consumption on or after the date of publication of the notice of the determination in the Federal Register. Other U.S. antidumping duty determinations, such as final results in administrative reviews and affirmative preliminary scope determinations, also result in the suspension of liquidation, as do certain countervailing duty determinations, such as a final affirmative determination in the context of an investigation or an affirmative preliminary scope determination. See also Anti-Dumping Code; Countervailing Duties; Customs; Dumping; Normal Value; Liquidation; Port of Entry; Tariff; United States Price; Valuation.

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TARGETING — A comprehensive mobilization of technology, capital, and skilled labor involving direct or indirect government intervention in the marketplace in support of a specific industry. Tax benefits, government loans, and government procurement policies that restrict foreign competition, as well as more subtle means of restricting competition and directing resources, are but a few of the practices that support domestic industries targeted for growth. The end result is an allocation of resources to specifically defined priority sectors of industry. See also Government Procurement Policies and Practices; Industrial Policy; Managed Trade; Market Access; Restrictive Business Practices; Unfair Trade Practice.

TARIFF — A duty (or tax) levied upon goods transported from one customs area to another either for protective or revenue purposes. Tariffs raise the prices of imported goods, thus making them generally less competitive within the market of the importing country unless that country does not produce the items so tariffed. After seven rounds of GATT trade negotiations that focused heavily on tariff reductions, tariffs are less important measures of protection than they used to be. The term "tariff" often refers to a comprehensive list or schedule of merchandise with the rate of duty to be paid to the government for importing products listed, whereas the term "duty" applies only to the rate applicable to an individual tariff item. See also Ad Valorem Equivalent; Ad Valorem Tariff; Bound Rates; Column 1 Rates; Column 2 Rates; Compound Tariff; Concession; Conventional Tariff; Customs Area; Customs Classification; Double Column Tariff; Effective Tariff Rate; General Tariff; Harmonization; Levy; Linear Reduction of Tariffs; Most-Favored-Nation Treatment; Nominal Tariff Rate; Price; Protection; Specific Tariff; Tariff Act of 1930; Tariff Escalation; Tariff Quota; Tax; U.S. International Trade Commission; Valuation.

TARIFF ACT OF 1930 — U.S. trade legislation that raised tariff rates on most articles imported by the United States, triggering comparable tariff increases by U.S. trading partners. The Tariff Act of 1930, which has been amended by subsequent trade legislation, is also known as the Smoot-Hawley Act, after the two legislators who sponsored it, and sometimes as the Grundy Tariff, after Joseph Grundy, president of the Pennsylvania Manufacturers Association, who was the chief lobbyist for it. See also Beggar-Thy-Neighbor Policy; Column 2 Rates; Countervailing Duties; Imports; Protectionism; Reciprocity; Retaliation; Tariff; Trade Agreements Act of 1934.

TARIFF COMMISSION — See U.S. International Trade Commission.

TARIFF ESCALATION — A situation in which tariffs on raw materials are nonexistent or relatively low, tariffs on semi-processed goods are moderate, and tariffs on manufactured goods are relatively high. Such escalation — which exists in the tariff schedules of many developed countries — amounts to greater protection of the manufacturing processes involved than is implied by the actual tariff rate and may therefore have the effect of discouraging the development of production facilities in developing countries. See also Effective Tariff Rate; Primary Commodity; Production; Protection; Tariff; Tariff Schedules.

TARIFF EXTERIEUR COMMUN (TEC) — See Common External Tariff.

TARIFF HARMONIZATION — See Harmonization.

TARIFF QUOTA — Application of a reduced or zero duty rate for a specified quantity of imported goods, or for goods imported during a given period. See also Specific Limitations on Trade; Tariff.

TARIFF-RATE QUOTA — A quota that is determined on the basis of the applicable tariff rate applied to imports. A predetermined amount of a good is allowed to enter at a reduced or zero tariff rate. After the quota has been filled, all subsequent shipments of that good during a specific period of time, such as a calendar year, are assessed a higher import tariff, usually the normal most-favored-nation tariff. See also Ad Valorem Tariff; Bound Rates; Compound Tariff; Conventional Tariff; Effective Tariff Rate; General Tariff; Market; Most-Favored-Nation Treatment; Nominal Tariff Rate; Specific Tariff; Tariff; Tariff Quota.

TARIFF SCHEDULES — Comprehensive lists of the tariffs a country applies to imported goods. See also Ad Valorem Tariff; Bound Rates; Compound Tariff; Conventional Tariff; Effective Tariff Rate; General Tariff; Levy; Most-Favored-Nation Treatment; Nominal Tariff Rate; Single-Column Tariff; Specific Tariff; Tariff; Tariff Quota.

TARIFF SCHEDULES OF THE UNITED STATES (TSUS) — See Bound Rates; Customs; Harmonized Tariff Schedule of the United States; Tariff.

TAX — A payment exacted on persons, corporations, and other economic entities by a government to help pay for government operations or to discourage the consumption of goods or services taxed by raising their cost. Taxes are distinguished by their compulsory character and by the lack of correlation between the amount paid and the value of the public services financed by the taxes to the taxpayers. See also Border Tax Adjustments; Direct Tax; Excise Tax; Indirect Tax; Road Tax; Sales Tax; Tariff; Value-Added Tax.

TAX INCENTIVES — See Industrial Policy.

TECHNICAL BARRIERS TO TRADE (TBT) — See Agreement on the Application of Sanitary and Phytosanitary Measures; Agreement on Technical Barriers to Trade; Nontariff Barriers; Quarantine, Sanitary, and Health Laws and Regulations; Standards.

TECHNICAL REGULATIONS — Regulations that lay down characteristics for products or related processes and production methods, including applicable administrative provisions, with which compliance is mandatory. It may also include or deal exclusively with terminology, symbols, packaging, marking, or labeling requirements as they apply to a product, process, or production method. The WTO Agreement on Technical Barriers to Trade obliges all WTO members to accord national treatment to fellow members in the administration of its technical regulations and to not apply technical regulations to create unnecessary obstacles to international trade, among other things. This agreement strengthens the provisions of its predecessor, the Tokyo Round Standards Code established in 1979 under the auspices of the GATT. See also Agreement on the Application of Sanitary and Phytosanitary Measures; Agreement on Government Procurement; Codes of Conduct; Customs and Administrative Entry Procedures; Government Procurement Policies and Practices; Licensing; Most-Favored-Nation; Nontariff Barriers; Packaging, Labeling, and Marking Regulations; Quarantine, Sanitary, and Health Laws and Regulations; Standards; Transparency.

TECHNOLOGICAL DEVELOPMENT — The acquisition by a country's nationals of the knowledge, skills, and organizational ability that enable them to produce goods and services more efficiently than they were able to prior to such acquisition. See also Technology.

TECHNOLOGY — Knowledge of the means and methods of producing goods and services, or the application of science to production or distribution, resulting in the creation of new products, new manufacturing processes, or more efficient methods of distribution. See also Adjustment; Distribution; Efficiency; Intellectual Property; Knowledge-Based Industry; Patent; Production; Structural Change; Trademark; Technology Transfer.

TECHNOLOGY TRANSFER — The movement of modern or scientific methods of production or distribution from one enterprise, institution, or country to another, as through foreign investment, international trade, licensing of patent rights, technical assistance, or training. Technology may also be transferred by giving it away (technical journals, conferences, emigration of technical experts, technical assistance programs) or by industrial espionage. See also Distribution; Production; Property; Structural Change; Technology.

TERMS OF TRADE — The ratio of prices (unit values) of a country's exports to the prices (unit values) of its imports. Some economists have discerned a deteriorating trend in this ratio for developing countries as a whole. Other economists maintain that whereas the terms of trade may have become less favorable for certain countries during certain periods — and even for all developing countries during some periods — the same terms of trade have improved for other developing countries in the same periods and perhaps for most developing countries during other periods. See also Balance of Payments; Balance of Trade; Developing Countries; Export Price; Unit Value.

TEXTILES — As defined by the Multi-Fiber Arrangement Regarding International Trade in Textiles, yarns, piece-goods, made-up articles, garments, and other products made of cotton, wool, manmade fibers, or blends thereof, in which any or all of those fibers in combination represent either the chief value of the fibers or 50 percent or more by weight (or 17 percent or more by weight for wool) of the product. Historically, the production of textiles has required more unskilled labor and less sophisticated capital goods and technology than other manufacturing industries. The textiles industry has thus often been among the first industries to operate efficiently in many developing countries. The structure of the industry has changed in recent years as textiles manufacturers in developed countries and the newly industrializing countries have increasingly adopted more capital-intensive mass production methods, especially for the latest synthetic fibers and complex knit cloths. In 1995, the WTO Agreement on Textiles and Clothing (ATC) superseded the MFA. Under the ATC, WTO members agreed to phase out the MFA's global system of bilateral textile and apparel quotas by the year 2005. See also Agreement on Textiles and Clothing; Capital Goods; Efficiency; Multi-Fiber Arrangement Regarding International Trade in Textiles; Sensitive Products; Technology.

THIRD-COUNTRY DUMPING — A situation in which the exports of a product from one country are being injured or threatened with injury as a result of exports of the same product from a second country into a third country at less than fair value. The Omnibus Trade and Competitiveness Act of 1988 established procedures for U.S. industries to petition the U.S. Trade Representative to request a foreign government that is a signatory to the GATT Anti-Dumping Code to initiate an antidumping investigation on behalf of a U.S. industry that claims it is being injured by dumping in that country's market. See also Anti-Dumping Code; Dumping; Market Disruption; Omnibus Trade and Competitiveness Act of 1988; United States Trade Representative.

THIRD WORLD — See Developing Countries.

THRESHOLD PRICE — A minimum price. In the case of the European Community, the price for grains and other agricultural products under which EC’s Common Agricultural Policy operates. The threshold price is fixed at a level that will bring the selling price of grains up to the existing price level in the marketing region within the European Community where supplies are lowest. See Common Agricultural Policy; European Community; Price; Restitutions; Variable Levy.

TIED LOAN — A loan made by a government agency that requires a foreign borrower to spend the proceeds in the lender's country or to buy the lender's products. See also Countertrade; Loan.

TOKYO DECLARATION — A statement signed in September 1973 by ministers of 105 countries that formally initiated the Tokyo Round of Multilateral Trade Negotiations. The declaration stressed the intent of the participants to give special priority to the trade interests of developing countries throughout the negotiations. See also Framework Agreement; General Agreement on Tariffs and Trade; North-South Trade; Special and Differential Treatment; Tokyo Round.

TOKYO ROUND — The Tokyo Round of Multilateral Trade Negotiations, formally initiated by the 1973 Tokyo Declaration. The Tokyo Round was the most comprehensive effort up to that time to eliminate, reduce, or control nontariff barriers that restrict nonagricultural trade; it was especially notable for having negotiated several codes of conduct designed to curtail the use of nontariff barriers as instruments of protection. More countries participated in these negotiations than in any previous round, including more than 20 developing countries that were not GATT members and several countries of Eastern Europe. The Tokyo Round produced agreements on dumping, customs valuation, import licensing procedures, government procurement practices, product standards, civil aircraft, meat and dairy products, and liquor duties. The Tokyo Round was carried out in Geneva and concluded there in 1979. See also Aircraft Agreement; Anti-Dumping Code; Codes of Conduct; Compensation; Customs; Customs Classification; Customs Harmonization; Customs Valuation Code; Dispute Settlement; Enabling Clause; Framework Agreement; Government Procurement Policies and Practices; Graduation; Harmonization; Imports; Kyoto Convention; Multilateral Trade Negotiations; Nontariff Barriers; North-South Trade; Protection; Quarantine, Sanitary, and Health Laws and Regulations; Safeguards; Special and Differential Treatment; Standards; Tariff; Technical Regulations; Tokyo Declaration; Trade Act of 1974; Trade Agreements Act of 1979; Transparency; Valuation; Williams Commission; World Customs Organization.

TOURISM — See Services.

TPC — See Trade Policy Committee.

TPM — See Trigger Price Mechanism.

TPRM — See Trade Policy Review Mechanism.

TRADE ACT OF 1974 — Legislation enacted by the U.S. Congress in late 1974 and signed into law on January 3, 1975, granting the U.S. president broad authority to enter into international agreements to reduce import barriers. The act stated that its major purposes were:

• To stimulate U.S. economic growth and to maintain and enlarge foreign markets for the products of U.S. agriculture, industry, mining, and commerce;
• To strengthen economic relations with other countries through open and nondiscriminatory trading practices;
• To protect American industry and workers against unfair or injurious import competition;
• To provide "adjustment assistance" to industries, workers, and communities injured or threatened by increased imports.

TRADE ACT OF 1988 — See Omnibus Trade and Competitiveness Act of 1988.

TRADE AGREEMENT — A bilateral or multilateral treaty or other enforceable compact committing two or more nations to specified terms of commerce, usually involving mutually beneficial concessions. See also Binding; Concession; General Agreement on Tariffs and Trade; World Trade Organization.

TRADE AGREEMENTS ACT OF 1934 — Legislation that amended the Tariff Act of 1930, providing authority for the United States to negotiate agreements with other countries for reciprocally beneficial tariff reductions. The resulting agreements were then applied to other countries through most-favored-nation clauses. The original 1934 legislation, as extended by several further acts of the U.S. Congress, provided authority for U.S. participation in the first five rounds of GATT trade negotiations, from 1947 through the Dillon Round. It was superseded by the Trade Expansion Act of 1962. See also Bilateral Trade Agreement; Dillon Round; Negotiations; Peril Point; Reciprocity; Tariff Act of 1930; Trade Agreement; Trade Expansion Act of 1962.

TRADE AGREEMENTS ACT OF 1979 — Legislation authorizing the United States to implement trade agreements dealing with nontariff barriers negotiated during the Tokyo Round, including agreements that required changes in existing U.S. laws and certain concessions that had not been explicitly authorized by the Trade Act of 1974. Specifically, the Trade Agreements Act of 1979 incorporated into U.S. law the Tokyo Round agreements on dumping, customs valuation, import licensing, government procurement practices, product standards, civil aircraft, meat and dairy products, and liquor duties. In addition, it extended the president's authority to negotiate trade agreements with foreign countries to reduce or eliminate nontariff barriers to trade. See also Aircraft Agreement; Anti-Dumping Code; Countervailing Duties; Customs Valuation Code; Dumping; Government Procurement Policies and Practices; Licensing Code; Nontariff Barriers; North-South Trade; Reciprocity; Safeguards; Special and Differential Treatment; Standards; Technical Regulations; Tokyo Round; Trade Act of 1974; Trade Agreement; Transparency; Valuation.

TRADE BARRIERS — Government laws, regulations, policies, or practices that either protect domestic products from foreign competition or artificially stimulate exports of particular domestic products. The United States Trade Representative classifies trade barriers into eight general categories:

1. import policies (tariffs and other import charges, quantitative restrictions, import licensing, and customs barriers);
   
2. standards, testing, labeling, and certification;
   
3. government procurement;
   
4. export subsidies;
   
5. lack of intellectual property protection;
   
6. service barriers;
   
7. investment barriers;
   
8. other barriers (for example, barriers encompassing more than one category or barriers affecting a single sector).
   

TRADE COMPLIANCE CENTER (TCC) — An office of the U.S. Department of Commerce that monitors, investigates, and evaluates foreign compliance with multilateral, bilateral, and other international trade agreements and standards of conduct. The TCC also acts within the International Trade Administration’s Market Access and Compliance unit to coordinate and promote foreign government compliance with trade agreements.

TRADE CREATION — See Trade Diversion.

TRADE DIVERSION — A shift in the pattern of origin of a country's imports, resulting from changes in trade policies or practices, which may or may not involve change in the overall volume or composition of the imports involved. Trade creation results when increased economic activity generates a larger total demand for imports. The establishment of a customs union causes participating countries to import goods from other countries in the union in place of traditional imports from countries outside the union; at the same time, however, greater economic efficiency may increase the total level of imports into the countries comprising the union. Trade theorists say the customs union will be beneficial to outside suppliers as well as participating countries if the trade creation resulting from the customs union exceeds the trade diversion, because this would entail a more efficient allocation of productive resources. See also Customs Union; Demand; Efficiency; Imports; Structural Change; Welfare.

TRADE EXPANSION ACT OF 1962 — The legislative authority for U.S. participation in the Kennedy Round of multilateral trade negotiations (1963-67). The legislation itself heavily influenced the content and procedures of the round, especially by granting the U.S. president general authority to negotiate — on a reciprocal basis — reductions of up to 50 percent in U.S. tariffs. (This authority expired June 30, 1967, thus predetermining the concluding date of the Kennedy Round.) U.S. duties below 5 percent ad valorem, duties on certain agricultural commodities, and duties on tropical products exported by developing countries could be reduced to zero under the act. The 1962 legislation explicitly eliminated the "peril point" provision that had limited U.S. negotiating positions in earlier GATT rounds, and instead called on the Tariff Commission and other agencies of the U.S. government to provide the president and his negotiators with information regarding the probable economic effects of specific tariff concessions. This act superseded the Trade Agreements Act of 1934, as amended. Some parts of the Trade Expansion Act were subsequently amended by the Trade Agreements Act of 1979. See also Kennedy Round; Linear Reduction of Tariffs; Peril Point; Round; Trade Agreements Act of 1934; United States Trade Representative.

TRADE FAIR — A market or trade exhibition, usually arranged under public or semi-public auspices, at which manufacturers and traders display their products to stimulate sales. Trade fairs were particularly popular in Europe during the Middle Ages, when they provided important large-scale markets. Since World War II, general trade fairs have served chiefly as international exhibitions of wares rather than as markets. Specialized trade fairs have played an important and increasing role in recent years as meeting places for buyers and sellers of specialized merchandise. See also Demand; Distribution; Export Promotion; Market; Supply.

TRADE MISSION — Experts and/or businessmen sent by a government or by commercial interests in one country to encourage exports to the market of another country. See also Distribution; Export Promotion; Exports; Market.

TRADE POLICY COMMITTEE (TPC) — A senior interagency committee of the U.S. government, chaired by the U.S. Trade Representative, that provides broad guidance to the president on trade policy issues. Members include the secretaries of State, Treasury, Commerce, Agriculture, and Labor. See also United States Trade Representative.

TRADE POLICY REVIEW MECHANISM (TPRM) — An annex to the WTO Agreement, a mechanism that provides for periodic review of each WTO member's trade policy regime. The country under review and the WTO produce documents describing the trade policy regime of the country, and all interested members participate in a special meeting where these documents are reviewed. The frequency with which a particular WTO member is reviewed is based on its share of world trade in goods and services. The four largest members are reviewed every two years. The next 16 largest members are reviewed every four years. Other members are reviewed every six years. The intervals between reviews for least developed members are even greater. See also Uruguay Round; World Trade Organization.

TRADEMARK — A mark or symbol secured by legal registration used by a manufacturer or trader to distinguish his or her goods from competing goods. See also Agreement on Trade-Related Aspects of Intellectual Property Rights; Commercial Counterfeiting; Property; Omnibus Trade and Competitiveness Act of 1988; Property; Trafficking in Counterfeit Goods and Services.

TRADE-RELATED ENVIRONMENTAL ISSUES — Elements of environmental policy with important implications for or impacts on the trading system. These can include:

• Environmental standards, on either product or process and production method (for example, pesticide residue standards on foodstuffs, energy efficiency standards for office machines, clean air requirements for gasoline);
  
• The use of trade restrictions for environmental purposes (for example, trade bans, reporting requirements, requirements to obtain prior consent of importing government before export) taken either in the context of multilateral environmental agreements or as national actions;
  
• Voluntary programs (eco-labeling).

TRADE-RELATED INVESTMENT MEASURES (TRIMS) — Restrictions on direct investment by foreign investors that have the effect of distorting trade and investment (for example, performance and local content requirements). See also Agreement on Trade-Related Investment Measures; Convertibility; Exchange Controls; Investment Performance Requirements.

TRADING WITH THE ENEMY ACT (TWEA) — See International Emergency Economic Powers Act.

TRAFFICKING IN COUNTERFEIT GOODS AND SERVICES — Intentionally dealing or attempting to deal in goods or services while knowingly using a mark that is identical to or substantially indistinguishable from a mark registered for those goods or services, the use of which is likely to cause confusion, to cause mistakes, or to deceive the consumer. Counterfeit trademark goods are generally regarded as any goods, including packaging, bearing without authorization a trademark identical to the validly registered trademark for such goods or that cannot be distinguished in its essential aspects from such a trademark, and which, thereby, infringes the rights of the owner of a trademark in question under the law of the country of importation. The WTO TRIPS Agreement obligates members to provide minimum standards of intellectual property rights protection in national laws and to enforce minimum standards for protecting intellectual property. TRIPS also establishes a comprehensive set of international rules and stronger measures at international borders to stop trade in counterfeit goods and services. See also Agreement on Trade-Related Aspects of Intellectual Property Rights; Commercial Counterfeiting; Intellectual Property; Knowledge-Based Industry; Property; Section 337; Special 301; Trademark; Uruguay Round Agreements Act; World Intellectual Property Organization.

TRANSACTION VALUE — See Customs Valuation Code; Valuation.

TRANSATLANTIC BUSINESS DIALOGUE (TABD) — A government-business initiative that aims to facilitate closer economic relations between the European Union and the United States by lowering trade and investment barriers that impede competitiveness on both sides of the Atlantic. The U.S. Department of Commerce acts as the lead agency for the U.S. government, and the European Commission acts as the lead for the European Union. The goal of the TABD is to focus governments' attention on issues for which consensus exists within the transatlantic business community and identify specific actions required from governments to facilitate the movement of goods and services. See also European Commission; European Community; European Union; Nontariff Barriers.

TRANSATLANTIC ECONOMIC PARTNERSHIP (TEP) — An initiative that builds on the New Transatlantic Agenda, adopted in 1995, to expand U.S.-EU cooperation on diplomatic, trade, and global concerns. The Transatlantic Economic Partnership was announced jointly by President Bill Clinton and his EU counterparts at the U.S.-EU Summit on May 18, 1998, in London. Under the TEP, the United States and the EU plan to reduce persistent barriers in manufacturing, services, and agriculture and tackle a wide range of bilateral and multilateral trade issues. See also European Community; European Union; Nontariff Barriers.

TRANSFER PAYMENTS — Within a national economy, payments made by the government or the wealthier sectors of a population to the poorer people in the country, as through social security payments, unemployment benefits, and widows' pensions. Such payments are not made in return for goods or services but to redistribute income. International transfer payments include grant aid by governments to developing countries and programs and activities of private voluntary agencies based in one country that bring financial benefits to people in another country and are considered part of the current account in the balance of payments. See also Additionality; Balance of Payments; Current Account; Direct Tax; Official Development Assistance; Overseas Private Investment Corporation.

TRANSIT ZONE — The area surrounding a port of entry in a coastal country that serves as a storage and distribution center for the convenience of a neighboring country — a land-locked country, for example — lacking adequate port facilities or access to the sea. A transit zone is administered so that goods in transit to and from the neighboring country are not subject to the customs duties, import controls, or many of the entry and exit formalities of the host country. A transit zone is a more limited facility than either a free trade zone or free port. See also Customs; Free Zone; Port of Entry.

TRANSNATIONAL CORPORATION — See Multinational Corporation.

TRANSPARENCY — Visibility and clarity of laws, regulations, and procedures. Some of the codes of conduct negotiated during the Tokyo Round sought to increase the transparency of nontariff barriers that impede trade. See also Codes of Conduct; Government Procurement Policies and Practices; International Arrangement on Export Credits; Nontariff Barriers.

TRANSPORTATION — See Services.

TRANSSHIPMENT — A shipment that has been moved through, imported, transferred, or unladen in one or more intermediary countries (other than their originating country) prior to importation into the final destination country.

TREATY OF FUSION — See European Community.

TREATY OF ROME — See European Community.

TREATY ON EUROPEAN UNION — See European Community; European Union.

TRIGGER PRICE MECHANISM (TPM) — A U.S. system for monitoring imported steel to identify imports that are possibly being dumped in the United States or subsidized by the governments of exporting countries. The minimum price under this system is based on the estimated landed cost at the U.S. port of entry of steel produced by the world's most efficient producers. Imported steel entering the United States below that price may trigger formal antidumping investigations by the U.S. Department of Commerce and the U.S. International Trade Commission. The TPM was in effect between early 1978 and March 1980. It was reinstated in October 1980 and suspended in January 1982. Between April 1982 and June 1988, TPM was used for imports of stainless steel round wire only. See also Domestic Subsidy; Dumping; Export Subsidy; Sensitive Products; Steel Voluntary Restraint Arrangements; Subsidy.

TRIMS — See Trade-Related Investment Measures.

TRIPS — See Agreement on Trade-Related Aspects of Intellectual Property Rights.

TROPICAL PRODUCTS — Traditionally, agricultural goods of export interest to developing countries in the tropical zones of Africa, Latin America, and East Asia, such as coffee, tea, spices, natural rubber, palm oil, bananas, and tropical hardwoods. See also Commodity; ACP Countries; Caribbean Basin Initiative; Common Fund; Forward Market; Integrated Program for Commodities; International Commodity Agreement; Lomé Convention; North-South Trade; Primary Commodity.

TSUS — See Harmonized Tariff Schedule of the United States.

TURNKEY CONTRACT — A compact under which a contractor assumes responsibility to a client for constructing productive installations and ensuring that they operate effectively before turning them over to the client. By centering responsibility for the contributions of all participants in the project in his own hands, the contractor is often able to arrange more favorable financing terms than the client could. The responsibility of the contractor ends when he hands over the completed installation to the client. See also Countertrade.

TWEA — See International Emergency Economic Powers Act.

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UNCITRAL — See United Nations Commission on International Trade Law.

UNCITRAL ARBITRATION RULES — See United Nations Commission on International Trade Law.

UNCTAD — See United Nations Conference on Trade and Development.

UNCTAD/GATT INTERNATIONAL TRADE CENTER (ITC) — See International Trade Center UNCTAD/GATT.

UNDERSTANDING ON NOTIFICATION, CONSULTATION, DISPUTE SETTLEMENT, AND SURVEILLANCE — See Framework Agreement.

UNDERSTANDING ON RULES AND PROCEDURES GOVERNING THE SETTLEMENT OF DISPUTES (DSU) — A WTO agreement that provides a mechanism for settling disputes. The DSU sets forth actions WTO members may take in response to nullification or impairment of their rights under any of the WTO agreements. The DSU takes a four-step approach to the settlement of disputes: consultation and conciliation, establishment of dispute panels, adoption of panel decisions, and follow-up surveillance. The first step is consultations between or among the parties concerned. The DSU provides rules for both normal and urgent consultations. If consultations are unsuccessful in resolving the dispute within established time limits, the WTO member that requested consultations may request the establishment of a panel to review the facts and recommend compensation or other appropriate action. A panel's rulings may be appealed to an independent appellate body established by the DSU. The DSU is designed to make dispute settlement more secure and predictable than under Articles XXII and XXIII of the GATT, where there were no fixed timetables, rulings were easier to block, and cases could drag on for long periods. The DSU introduced a more structured process with fixed deadlines and more clearly defined procedures. Under the GATT procedures, rulings could be adopted only by a consensus of the contracting parties, meaning that a single objection — including the objection of a party to the dispute — could block the ruling. Under the DSU, rulings are automatically adopted unless there is a consensus to reject a ruling. This means that a member country that wants to block a ruling must persuade all other WTO members (including its adversary in the case) to adopt its view. By reducing the scope for unilateral actions, the DSU is intended to guarantee fair trade for less powerful countries. A WTO member is also expected to hold consultations with other interested members to discuss any trade restrictive measures it imposes for balance-of-payments reasons. The Dispute Settlement Body also monitors the implementation of the rulings and recommendations, and has the power to authorize retaliation when a country does not comply with a panel ruling. See also Arbitration; Article 23 (GATT Article XXIII); Consultations; Dispute Settlement; Framework Agreement; Panel of Experts; Uruguay Round.

UNDERWRITER — As used in the insurance industry, an insurance company, investment banker, or other financial agent that accepts the risk of insuring specified goods, especially in shipping. See also Capital Market; Insurance; Risk.

UNDP — See United Nations Development Program.

UNFAIR TRADE PRACTICES — Unusual government support to firms — perhaps export subsidies or certain anti-competitive practices by firms themselves, such as dumping, boycotts, or discriminatory shipping arrangements — that result in competitive advantages for those firms in international trade. See also Antitrust; Boycott; Cartel; Competition Policy; Competitive; Demand; Domestic Subsidy; Dumping; Efficiency; Export Subsidy; Market; Monopoly; Nontariff Barriers; Price; Protection; Restrictive Business Practices; Section 301.

UNILATERAL — An action taken by a single country on its own initiative, and not in any way dependent upon or conditional upon the actions of any other country or countries. See also Bilateral; Multilateral; Reciprocity.

UNIT VALUE — The quotient showing the total value of a particular trade flow during a specified period divided by its volume. Unit values are often reflected in international trade statistics instead of prices. See also Terms of Trade.

UNITED NATIONS COMMISSION ON INTERNATIONAL TRADE LAW (UNCITRAL) — A body charged with furthering the progressive harmonization of international trade law in order to reduce the disparities in national laws that inhibit the free flow of international trade. UNCITRAL, which was created in 1966 by the UN General Assembly, works in a number of areas including the international sale and transport of goods, international commercial arbitration, public procurement, and international payments. Some of UNCITRAL's best known contributions include the United Nations Convention on Contracts for the International Sale of Goods (Vienna, 1980) and the UNCITRAL Arbitration Rules. The Secretariat for UNCITRAL is located in Vienna, Austria. See also Harmonization.

UNITED NATIONS CONFERENCE ON THE LEAST DEVELOPED COUNTRIES — See Substantial New Program of Action.

UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT (UNCTAD) — A subsidiary organ of the UN General Assembly that seeks to focus international attention on economic measures that might accelerate Third World development. Its first conference, UNCTAD-I, was convened in Geneva in 1964, and sessions were held quadrennially up to 1976: UNCTAD-II, New Delhi, 1968; UNCTAD-III, Santiago, 1972; and UNCTAD-IV, Nairobi, 1976. UNCTAD-V met in Manila in 1979, UNCTAD-VI in Belgrade in 1983, UNCTAD-VII in Geneva in 1987, UNCTAD VIII in Cartagena, Colombia, in 1992, and UNCTAD-IX in Midrand, South Africa, in 1996. UNCTAD-X is scheduled for Thailand in 2000. The UNCTAD Trade and Development Board, which exercises the powers of the conference between its sessions, meets twice a year; the main UNCTAD committees — which include those concerned with commodities, shipping, manufactures, invisibles, and financing related to trade and the transfer of technology — meet several times between sessions of the conference. Negotiations in UNCTAD take place principally between Group B (developed countries) and the Group of 77 (developing countries), which separately determine their own positions through intra-group discussions prior to the negotiations. UNCTAD is supported by a permanent secretariat based in Geneva. UNCTAD has been an executing agency for United Nations Development Program technical assistance projects since 1968 and now administers such projects as ports management, regional economic integration, the transfer of technology, the improvement of customs procedures, and other fields related to its programs and activities. As of 1999, UNCTAD had 188 member states. See also Common Fund; Customs; Economic Cooperation Among Developing Countries; Economic Development; Export Credit Guarantee Facility; Generalized System of Preferences; Global System of Trade Preferences; Group B; Group D; Group of 77; Integrated Program for Commodities; International Trade Center UNCTAD/GATT; Non-Aligned Movement; North-South Trade; Restrictive Business Practices; United Nations Development Program.

UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS — See United Nations Commission on International Trade Law.

UNITED NATIONS DEVELOPMENT PROGRAM (UNDP) — The arm of the United Nations that provides financial resources to support technical assistance activities designed to stimulate economic development in developing countries, normally through such specialized agencies of the United Nations system as the World Health Organization, the International Labor Organization, and the Food and Agriculture Organization, which serve as "executing agencies" for the UNDP. See also Core Labor Standards; United Nations Conference on Trade and Development.

UNITED NATIONS MONETARY AND FINANCIAL CONFERENCE — See Bretton Woods Conference.

UNITED STATES PRICE (USP) — The price at which merchandise is sold in the U.S. market. Under U.S. antidumping law, dumping consists of sales of merchandise exported to the United States at "less than fair value," when such sales materially injure or threaten material injury to producers of like merchandise in the United States. The determination that sales have been made at less than fair value involves a comparison of "normal value" — the price at which the merchandise is sold within the exporting country or to third countries (or a "constructed value") — and the "U.S. price." USP is either the export price or the constructed export price. See also Agreement on Implementation of Article VI of GATT 1994; Anti-Dumping Code; Constructed Export Price; Dumping; Export Price; Level of Trade Adjustments; Normal Value; Uruguay Round Agreements Act.

UNITED STATES TRADE REPRESENTATIVE (USTR) — A cabinet-level official, with the rank of ambassador, who is the principal adviser to the U.S. president on international trade policy. The U.S. Trade Representative is concerned with the formulation of U.S. trade policy, the expansion of U.S. exports, U.S. participation in the WTO (and formerly in the GATT), commodity issues, East-West and North-South trade, and direct investment related to trade. As chairman of the U.S. Trade Policy Committee, he/she is also the primary official responsible for U.S. participation in all international trade negotiations. Prior to the Trade Agreements Act of 1979, which created the Office of the U.S. Trade Representative, the comparable official was known as the president's special representative for trade negotiations, a position first established by the Trade Expansion Act of 1962. See also General Agreement on Tariffs and Trade; National Trade Estimate Report; Negotiations; Trade Agreements Act of 1979; Trade Expansion Act of 1962; Trade Policy Committee.

UNIVERSAL COPYRIGHT CONVENTION — See Bern Convention.

UPSTREAM SUBSIDIES — Subsidies provided to a manufacturer's supplier of inputs for a product. To be included in the calculation of the countervailing duty, the upstream subsidy must provide a competitive benefit, or be passed through, to the downstream producer of the product under investigation and must have a significant effect on the cost of manufacturing the product under investigation. Petitioners must submit substantial argumentation and evidence before an upstream subsidy investigation is started. See also Countervailing Duties; Subsidies Code; Subsidy.

UR — See Uruguay Round.

URUGUAY ROUND — The final series of GATT multilateral trade negotiations aimed at revising, updating, and expanding the coverage of the GATT. The Uruguay Round was formally launched in September 1986 at the GATT ministerial in Punta del Este, Uruguay, and was concluded in Geneva in December 1993. The conclusion of the Uruguay Round resulted in the establishment in 1995 of the World Trade Organization and a number of agreements governing various aspects of trade and setting forth obligations applicable to WTO members. As may be seen by the WTO and the underlying agreements that they produced, the Uruguay Round negotiations focused on the elimination of tariff and nontariff barriers to trade and on the development of clear, enforceable international trading rules. The provisions of the WTO Agreement accorded more time to developing countries than to industrialized countries for coming into compliance with WTO obligations; least developed countries sometimes were accorded even more time or exempted altogether. The following are highlights of the agreement.

• GATT member countries agreed to cut their import tariffs by a 36 percent average.
  
• Countries agreed to end the 20-year-old system of import quotas on textiles and apparel by 2005; quotas are to be converted into tariffs, which will be reduced over time.
  
• Countries agreed, by 2001, to scale back direct export subsidies by 36 percent below rates in place between 1986 and 1990 and to reduce the quantity of subsidized commodities exported. They also agreed to convert quotas, import licenses, and other import limits into tariffs that would be gradually reduced.
  
• Countries agreed to basic rules so that service providers are afforded the same treatment overseas as in their home markets. Negotiations in some services sectors will continue.
  
• Countries agreed to protect and enforce patents, trademarks, and copyrights, and to discipline the trade of counterfeited creative works and inventions.
  
• Countries agreed to eliminate investment measures that limit or force certain types of investments, to offer national treatment to foreign investors, and to eliminate quotas and other restraints.
  
• Countries agreed to more predictable rules concerning the trade legality of subsidies.
  
• Countries agreed to more detailed rules governing the ability of GATT members to take action against the imports of a product sold at an unfairly discounted export price.
  
• Countries agreed to stronger rules concerning temporary import limits applied to protect domestic industries from surges of fairly traded imports (safeguards). Members agreed not to maintain safeguard protections for more than eight years and to prohibit "gray area measures" — voluntary export restraints and other informal agreements to curtail fairly traded imports.
  
• Members created the World Trade Organization, a permanent organization, to replace the GATT (which was meant to be a temporary structure) with a stronger institution.
  
• Members agreed to stronger dispute resolution rules by allowing countries to block a finding by an expert panel only if all members oppose the finding.

URUGUAY ROUND AGREEMENTS ACT — The act that implemented in U.S. law the trade agreements resulting from the Uruguay Round. Enacted in 1994 with an effective date of January 1, 1995, the URAA includes provisions amending the U.S. antidumping and countervailing duty laws in response to the WTO Agreement on Implementation of Article VII of the GATT 1994 and the Agreement on Subsidies and Countervailing Measures. It also contains provisions implementing the Uruguay Round agreements relating to import safeguard measures; foreign trade barriers and unfair trade practices in import trade; textiles and apparel trade; government procurement; technical barriers to trade (product standards); trade in agricultural products; and the trade-related aspects of intellectual property rights. Among the domestic laws affected were the Tariff Act of 1930, the Trade Act of 1974, the Trade Agreements Act of 1979, the Agricultural Trade Act of 1978, and U.S. copyright, trademark, and patent law. See also Agreement on Agriculture; Agreement on the Application of Sanitary and Phytosanitary Measures; Agreement on Import Licensing Procedures; Agreement on Implementation of Article VI of GATT 1994; Agreement on Implementation of Article VII of GATT 1994; Agreement on Preshipment Inspection; Agreement on Rules of Origin; Agreement on Safeguards; Agreement on Subsidies and Countervailing Measures; Agreement on Technical Barriers to Trade; Agreement on Textiles and Clothing; Agreement on Trade-Related Aspects of Intellectual Property Rights; Agreement on Trade-Related Investment Measures; General Agreement on Trade in Services; Omnibus Trade and Competitiveness Act of 1988; Sunset Review; Tariff Act of 1930; Trade Act of 1974; Trade Agreements Act of 1979; Understanding on Rules and Procedures Governing the Settlement of Disputes; Uruguay Round; World Trade Organization.

U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT — See Agency for International Development.

U.S. BUREAU OF EXPORT ADMINISTRATION (BXA) — See Bureau of Export Administration.

U.S.-CANADA FREE TRADE AGREEMENT (FTA or CFTA) — A free trade agreement implemented on January 1, 1989, between the United States and Canada following approval and implementation of its terms by the Congress in 1988. The United States and Canada decided to suspend the FTA upon the entry into force, on January 1, 1994, of the North American Free Trade Agreement, which extended the benefits of the FTA to Mexico. The original agreement provided for the elimination of tariffs on all U.S.-Canada trade by 1998. It also provided improved access with respect to government procurement and a code of principles on services trade, including national treatment, the right to sell across borders, the right of establishment, and transparency in regulations. Additional commitments were made in the areas of telecommunications, tourism, financial services, and architectural services. Provisions in this comprehensive free trade agreement dealt with foreign investment regulation, bilateral energy trade and access to energy supplies, border crossing procedures for certain professional and technical personnel, agriculture, and dispute settlement. The FTA was the world's largest and most comprehensive bilateral free trade agreement until NAFTA entered into force. See also Bilateral Trade Agreement; Common External Tariff; Customs; Customs Area; Customs Union; Free Trade Area Agreement; Free Trade Area of the Americas; Free Zone; Kyoto Convention; MERCOSUR; North American Free Trade Agreement; Tariff; Tariff Schedules; Trade Diversion.

U.S.-CANADA TRADE COMMISSION — An organization created under chapter 18 of the U.S.-Canada Free Trade Agreement to consult on all matters affecting the implementation and operation of the FTA. See also North American Free Trade Agreement; U.S.-Canada Free Trade Agreement.

U.S. FOREIGN AND COMMERCIAL SERVICE (USF&CS) — An organization within the U.S. Department of Commerce that has offices in more than 220 cities worldwide to assist U.S. exporters by providing expert counseling and advice, information on markets abroad, international contacts, and advocacy services. Overseas, the Commercial Service is present in 78 countries. In the United States, the Commercial Service operates 92 Export Assistance Centers that offer companies a comprehensive range of export facilitation services in one location. The Commercial Service promotes U.S. exports through government-to-government representation; supports the National Export Strategy's emphasis on big emerging markets through specialized export counseling and facilitation services, including customized market research covering specific industry sectors and current business trends; location of potential overseas representatives and distributors; and the provision of export promotion assistance in key industries, including environmental technologies and defense conversion. See also Balance of Trade; Bureau of Export Administration; Exports; Export-Import Bank of the United States; Imports; International Trade Administration; National Trade Data Bank; Overseas Private Investment Corporation.

U.S. IMPORT ADMINISTRATION (IA) — See Import Administration.

U.S. INTERNATIONAL TRADE ADMINISTRATION (ITA) — See International Trade Administration.

U.S. INTERNATIONAL TRADE COMMISSION (USITC) — Formerly the U.S. Tariff Commission, an organization created in 1916 by an act of Congress. Its mandate was broadened and its name changed by the Trade Act of 1974. The USITC is an independent fact-finding agency of the U.S. government, reporting to Congress, that studies the effects of tariffs and other restraints to trade on the U.S. economy. It conducts public hearings to assist in determining whether particular U.S. industries are injured or threatened with injury by dumping, export subsidies in other countries, or rapidly rising imports. It also studies the probable economic impact on specific U.S. industries of proposed reductions in U.S. tariffs and nontariff barriers to imports. Its six commissioners are appointed by the president, with the advice and consent of the U.S. Senate, for nine-year terms. See also Countervailing Duties; Domestic Subsidy; Dumping; Escape Clause; Export Subsidy; Imports; Peril Point; Tariff; Trade Act of 1974.

U.S.-ISRAEL FREE TRADE AREA AGREEMENT — The first free trade agreement entered into by the United States. The agreement, which took effect on September 1, 1985, called for the staged elimination of tariffs between the two countries over a 10-year period. The agreement also established a joint commission to supervise the agreement and to periodically review the bilateral relationship. See also Bilateral Trade Agreement; Binding; Concession; Consultations; Free Trade Area Agreement; Tariff; Trade Agreement.

USITC — See U.S. International Trade Commission.

U.S.-JAPAN AUTOMOTIVE FRAMEWORK AGREEMENT — An agreement between the government of the United States and the government of Japan entered into in 1995 to facilitate access to the Japanese markets for autos and auto parts, to address issues of market penetration at distribution and retail levels, and to initiate deregulation of the auto parts aftermarket. This agreement includes the principle that all measures undertaken pursuant to the agreement are to be on a most-favored-nation basis. In this regard, measures benefiting the United States undertaken in connection with the agreement would have to be matched by similar measures in relation to any third country. See also General Agreement on Tariffs and Trade; Market Access; Most-Favored-Nation Treatment; Structural Impediments Initiative; World Trade Organization.

USP — See United States Price.

U.S. REVENUE ACT OF 1971 — See Domestic International Sales Corporation.

U.S. STRATEGIC AND CRITICAL STOCKPILING ACT OF 1946 — See Strategic Stockpiles.

U.S. TARIFF COMMISSION — See U.S. International Trade Commission.

USTR — See United States Trade Representative.

U.S. TRADE POLICY COMMITTEE — See Trade Policy Committee.

UTILITY — The capacity of goods and services to satisfy human wants or desires. Since utility involves subjective appraisal and depends on the personal tastes of the consumer, it cannot be measured by any standard yardstick. See also Consumption; Demand; Goods; Price; Services; Value; Welfare.

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VALUATION — The appraisal of the worth of imported goods by customs officials for the purpose of determining the amount of duty payable in the importing country. Previously, the GATT Customs Valuation Code and, currently, the WTO Agreement on Implementation of Article VII of the GATT 1994, obligate governments of signatories to use the transaction value of imported goods — or the price actually paid or payable for them — as the principal basis for valuing the goods for customs purposes. See also Agreement on Implementation of Article VII of GATT 1994; Codes of Conduct; Customs; Customs Classification; Free Zone; Imports; Liquidation; Minimum Valuation; Most-Favored-Nation Treatment; Suspension of Liquidation; Tariff; Tariff Schedules; World Customs Organization.

VALUE — The intrinsic worth of specific goods or services, generally identifiable as the amount of money they can be exchanged for at any given time. See also Money; Price; Utility.

VALUE-ADDED TAX (VAT) — An indirect tax on consumption that is levied at each discrete point in the chain of production and distribution, from the raw material stage to final consumption. Each processor or merchant pays a tax proportional to the amount by which he or she increases the value of the goods purchased for resale after making his or her own contribution. The value-added tax is imposed throughout the European Community and EFTA countries, as well as in many other trading nations, but not the United States. See also Border Tax Adjustments; Consumption; Distribution; Harmonization; Indirect Tax; Sales Tax; Tax; Value.

VARIABLE LEVY — Under the European Community's Common Agricultural Policy, a duty that increases or decreases as domestic or world prices fluctuate to ensure that the price of the imported product after payment of duty will equal a predetermined "gate" price. See also Common Agricultural Policy; European Community; Restitutions; Threshold Price.

VAT — See Value-Added Tax.

VENTURE CAPITAL — See Risk.

VISIBLE TRADE — Imports, exports, and re-exports of merchandise. See also Balance of Payments; Goods; Invisible Trade.

VOLUNTARY RESTRAINT AGREEMENTS (VRAs) — Arrangements through which exporters voluntarily restrain certain exports, usually through export quotas, to avoid economic dislocation in an importing country and to avert the possible imposition of mandatory import restrictions. Such arrangements do not normally entail compensation for the exporting country. See also Compensation; Export Quotas; Export Restraints; Orderly Marketing Agreements; Steel Voluntary Restraint Arrangements.

VRA — See Steel Voluntary Restraint Arrangements; Voluntary Restraint Agreements.

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WAIVER — A formal exemption of a right or claim. A waiver in GATT is a formal agreement of the contracting parties to relinquish or forego legal rights or to suspend the application of specific GATT provisions. See also General Agreement on Tariffs and Trade; Section 22.

WASSENAAR ARRANGEMENT — An agreement adopted by the United States and 32 other countries in July 1996 as the successor to the Coordinating Committee for Multilateral Export Controls (COCOM). The Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies established a multilateral export control arrangement to enhance regional and international security by promoting transparency and greater responsibility in transfers of conventional arms and dual-use goods and technologies, thus preventing destabilizing accumulations of such items. Participating states have committed to exchange information on exports of dual-use goods and technologies to nonparticipating states for the purposes of enhancing transparency and assisting in developing common understandings of the risks associated with the transfer of these items. See also Coordinating Committee for Multilateral Export Controls; Embargo.

WATCH LIST (WL) — See Priority Foreign Country.

WEALTH — Capital, money, property, possessions, evidence of ownership, access to benefits, or anything else that has material value. See also Capital; Money; Property; Value.

WEALTH TAX — See Direct Tax.

WEBB-POMERENE ACT — U.S. legislation enacted in 1918 that exempts associations of U.S. firms engaged in export trade from U.S. antitrust laws, so long as they do not restrain any U.S. competitor of the association. See also Antitrust; Competition Policy; Export Trading Company; Monopoly; Restrictive Business Practices; Unfair Trade Practices.

WELFARE — State or degree of economic well-being. According to classical economists, advances in the overall welfare of a country is the proper objective of economic and trade policy. The term is associated with the work of Arthur Cecil Pigou, a British economist who conceived of the costs of production as including social costs. See also Capital; Comparative Advantage; Economic Development; Efficiency; Imports; Infrastructure; Money; Production; Property; Structural Change; Trade Diversion; Value; Wealth.

WEST — See East-West Trade.

WILLIAMS COMMISSION — A prestigious panel appointed by President Richard Nixon in 1970 to explore U.S. trade policy interests. The commission's basic 1971 recommendation — that the U.S. government should initiate a major round of trade negotiations — ultimately led to the Trade Act of 1974 and the Tokyo Round of Trade Negotiations. See also Tokyo Round; Trade Act of 1974.

WILLIAMSBURG SUMMIT — A meeting in May 1983 of the heads of state of seven major developed countries at Williamsburg, Virginia, which concluded, among other things, that international consultations should be initiated, looking toward a new GATT round of trade negotiations and on conditions for improving the international monetary system. See also General Agreement on Tariffs and Trade; Liberalization; Round.

WIPO — See World Intellectual Property Organization.

WOOLEN TEXTILES — See Multi-Fiber Arrangement Regarding International Trade in Textiles; Sensitive Products; Textiles.

WORKERS' RIGHTS — Certain job conditions that workers are entitled to, such as a safe and clean workplace or reasonable hours. The 1974 Trade Act, as amended by the 1988 Trade Act, specifies acts, policies, and practices of a foreign government that may be considered unreasonable because they deny such rights. These practices can be actionable under Section 301 of the Trade Act of 1974 if they also burden or restrict U.S. commerce. See also Core Labor Standards; Trade Act of 1974; Section 301; Trade Act of 1988.

WORKING PARTY — A specialized intergovernmental body established by a higher body to study a particular set of issues and report its findings and recommendations. As was the case under the GATT, under the WTO a working party may be designated by members to consider a specialized trade policy problem, such as the formation of a customs union. Its recommendations may include suggestions regarding actions that specific WTO members might take. Such working parties are customarily open to all countries that wish to participate. See also Dispute Settlement; General Agreement on Tariffs and Trade; World Trade Organization.

WORLD BANK — Formally, the International Bank for Reconstruction and Development (IBRD), an intergovernmental financial institution located in Washington, D.C. The World Bank’s objectives are to help raise productivity and incomes and reduce poverty in developing countries. It was established in December 1945 on the basis of a plan developed at the Bretton Woods Conference of 1944. The World Bank loans financial resources to creditworthy developing countries. It raises most of its funds by selling bonds in the world's major capital markets. Its bonds have, over the years, earned a quality rating enjoyed only by sound governments and leading corporations. Projects supported by the World Bank normally receive high priority within recipient governments and are usually well planned and supervised. The World Bank earns a profit, which is plowed back into its capital. See also Bond; Bretton Woods Conference; Capital Market; Developing Countries; Economic Development; Graduation; International Development Association; International Finance Corporation; International Monetary Fund; Loan; Multilateral Aid; Multilateral Investment Guarantee Agency.

WORLD CUSTOMS ORGANIZATION — A 93-member international organization, with headquarters in Brussels, Belgium, whose purpose is to obtain, in the interest of international trade, the highest possible degree of uniformity among the customs systems of member nations. The World Customs Organization was established in 1952 as the Customs Cooperation Council and subsequently renamed. The United States became a member on November 5, 1970. The U.S. Customs Service is the lead U.S. government agency in dealing with the various activities of the council, including the work of the Harmonized System Committee. See also ATA Carnet; Codes of Conduct; Customs; Customs and Administrative Entry Procedures; Customs Classification; Customs Cooperation Council Nomenclature; Customs Harmonization; Harmonization; Harmonized System; Harmonized Tariff Schedule of the United States; Kyoto Convention; Most-Favored-Nation Treatment; Nontariff Barriers; Port of Entry; Quarantine, Sanitary, and Health Laws and Regulations; Tariff; Valuation.

WORLD INTELLECTUAL PROPERTY ORGANIZATION (WIPO) — A specialized agency of the United Nations system that seeks to promote international cooperation in the protection of intellectual property. WIPO has some 170 member states and currently administers 21 intellectual property treaties, including the 1883 International Union for the Protection of Industrial Property (Paris Convention, or Paris Union) and the 1886 International Union for the Protection of Literary and Artistic Works (Bern Convention, or Bern Union). As an organization, WIPO has recently taken an aggressive role in harmonizing intellectual property law with the introduction, in 1996, of the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT). Also in 1996, the Agreement Between the World Intellectual Property Organization and the World Trade Organization entered into force. This agreement facilitates cooperation between WIPO and the WTO in implementing the TRIPS Agreement. WIPO is located in Geneva, Switzerland. See also Agreement on Trade-Related Aspects of Intellectual Property Rights; Bern Convention; Commercial Counterfeiting; Copyright; Intellectual Property; Knowledge-Based Industry; Patent; Process Patent; Property; Technology; Technology Transfer; Trademark; Trafficking in Counterfeit Goods and Services.

WORLD TRADE ORGANIZATION (WTO) — A single institutional framework encompassing the General Agreement on Tariffs and Trade and all the agreements and legal instruments negotiated in the Uruguay Round. As part of the agreement reached at the culmination of the Uruguay Round, the GATT contracting parties agreed to create a new, permanent umbrella organization — the World Trade Organization — to replace the GATT organization. The WTO facilitates the implementation and administration of the agreements concluded during the Uruguay Round. Like the GATT organization that it replaced, the WTO provides a forum for multilateral trade negotiations, conducts reviews of member country trade policies, and cooperates with the World Bank and the International Monetary Fund in an attempt to achieve greater coherence in global economic policy-making. However, the WTO goes beyond the GATT organization in several ways, all intended to limit the scope for unilateral action by members. First, the range of trade issues that the WTO addresses has been significantly expanded. Second, the WTO has instituted a much stronger dispute settlement procedure. Third, the WTO provides a sense of permanence that the GATT organization, which was intended to be only a temporary institution, did not supply. Finally, under the WTO, member countries are no longer permitted to accede selectively to some but not all of the multilateral agreements that constitute the Uruguay Round Agreements, as was the case with the Tokyo Round Agreements. Instead, nations that join the WTO must agree to be bound by all the Uruguay Round Agreements (with the exception of four plurilateral agreements). See also Codes of Conduct; Consultations; Dispute Settlement; General Agreement on Tariffs and Trade; Tokyo Round; Uruguay Round; Working Party.
ORGANIZATION OF THE WTO: Like GATT, the WTO maintains a secretariat headed by a director-general. It meets in ministerial session at least once every two years. Between these ministerial sessions, the WTO's General Council, composed of representatives of all WTO members, meets monthly. The General Council oversees the running of the dispute settlement body and the trade policy review mechanism, under which the trade policies of individual WTO members are examined periodically. Under the General Council are several subsidiary bodies, including a Council on Trade in Goods, a Council on Trade-Related Intellectual Property Rights, and a Council for Trade in Services. See also Brussels Ministerial; Codes of Conduct; Consultations; Dispute Settlement; GATT Ministerial Meeting of 1982; Illustrative List; Montreal Ministerial; Multilateral Trade Negotiations; Panel of Experts; Punta del Este Ministerial; Seattle Ministerial; Working Party.
RELATIONSHIP BETWEEN GATT AND WTO: The terms "WTO" and "GATT" each designate both an entity and a multilateral agreement governing international trade. From 1947 to 1994, GATT referred to the organization headquartered in Geneva through which the contracting parties to the General Agreement on Tariffs and Trade would consult regarding the application of the agreement's provisions, as well as a multilateral trade agreement among autonomous economic entities — the General Agreement on Tariffs and Trade, sometimes referred to as GATT 1947 — aimed at expanding international trade as a means of raising world welfare. With the establishment of the WTO in 1995, however, the GATT organization ceased to exist. In contrast, as discussed below, the GATT agreement was incorporated in total into the constituent agreements of the WTO in a document referred to as GATT 1994. The parties obligated under the GATT and WTO agreements are not identical, but WTO members must, as a prerequisite to membership, be contracting parties to the GATT. Moreover, the entry into force of the WTO Agreement, with its various substantive agreements, did not terminate the force and effect of the GATT provisions to which contracting parties are obligated. Indeed, many WTO agreements currently in force build on, clarify, or strengthen provisions contained in the GATT agreement. See also Accession; Contracting Party; General Agreement on Tariffs and Trade; Protocol of Accession; Trade Policy Review; Uruguay Round.
CONSTITUENT AGREEMENTS OF THE WTO: The Uruguay Round concluded on April 15, 1995, with the signing at Marrakesh, Morocco, of the Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations. The 119 nations that signed the final act agreed to submit to their governments for approval the Agreement Establishing the World Trade Organization (the WTO Agreement), which contained the substantive agreements negotiated during the Uruguay Round or carried over (sometimes in renegotiated form) from the GATT organization. The WTO Agreement sets out the general rules governing the structure and function of the new WTO and contains in four annexes the new and continued substantive agreements. Annex 1 contains all multilateral agreements on trade per se, including trade in goods, trade in services, and trade in intellectual property. Specifically, Annex 1A contains the following 13 multilateral agreements on trade in goods: General Agreement on Tariffs and Trade 1994 (GATT 1994); Agreement on Agriculture; Agreement on the Application of Sanitary and Phytosanitary Measures (SPS); Agreement on Textiles and Clothing; Agreement on Technical Barriers to Trade; Agreement on Trade-Related Investment Measures (TRIMS); Agreement on Implementation of Article VI of GATT 1994 (Antidumping); Agreement on Implementation of Article VII of GATT 1994 (Customs Valuation); Agreement on Preshipment Inspection; Agreement on Rules of Origin; Agreement on Import Licensing Procedures; Agreement on Subsidies and Countervailing Measures; and Agreement on Safeguards.

Annex 1B contains the General Agreement on Trade in Services (GATS), and Annex 1C contains the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Annex 2 contains the Understanding on Rules and Procedures Governing the Settlement of Disputes. Annex 3 contains the WTO's Trade Policy Review Mechanism. Annex 4 contains the four plurilateral trade agreements: Agreement on Trade in Civil Aircraft, Agreement on Government Procurement, International Dairy Agreement, and International Bovine Meat Agreement.

The multilateral agreements in Annexes 1, 2, and 3 are integral parts of the WTO Agreement that are binding on all members. The plurilateral agreements in Annex 4, on the other hand, are binding only on those members that have accepted to be bound by them. The Dairy and Bovine Meat agreements were terminated at the end of 1997. See also Agreement on Agriculture; Agreement on the Application of Sanitary and Phytosanitary Measures; Agreement on Implementation of Article VI of GATT 1994; Agreement on Import Licensing Procedures; Agreement on Implementation of Article VII of GATT 1994; Agreement on Preshipment Inspection; Agreement on Rules of Origin; Agreement on Safeguards; Agreement on Subsidies and Countervailing Measures; Agreement on Technical Barriers to Trade; Agreement on Textiles and Clothing; Agreement on Trade-Related Aspects of Intellectual Property Rights; Agreement on Trade-Related Investment Measures; Aircraft Agreement; Basic Telecommunications Services Agreement; Codes of Conduct; Customs; Customs Classification; Free Zone; General Agreement on Tariffs and Trade; General Agreement on Trade in Services; Imports; Information Technology Agreement; Liquidation; Minimum Valuation; Most-Favored-Nation Treatment; Multilateral Trade Organization; Sunset Review; Suspension of Liquidation; Tariff; Tokyo Round; Trade Policy Review Mechanism; Trade-Related Environment Issues; Trade-Related Investment Measures; Understanding on Rules and Procedures Governing the Settlement of Disputes; Uruguay Round; Uruguay Round Agreements Act; Valuation; World Customs Organization.

WTO — See Agreement on Trade-Related Aspects of Intellectual Property Rights; Trafficking in Counterfeit Goods and Services; World Trade Organization.

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YAOUNDÉ CONVENTION — See Lomé Convention.

YARNS — See Multi-Fiber Arrangement Regarding International Trade in Textiles; Sensitive Products; Textiles.